Jennifer Granholm

I’ve been a little mystified by reporting on Michigan’s unemployment of late. There was this NYT story that gave credit to Rick Snyder credit for, “presiding over an employment rebound in a state that not long ago had the highest jobless rate in the nation” (and which I beat up here). There’s this MLive article that reports, “the state’s jobless rate has dropped from a high of 14.2 percent in August 2009 to 9 percent last month” without noting that that 9% was .7% higher than recent lows. And even this AP report on Rick Snyder’s decision to lay off a almost a quarter of the unemployment staffers (with the part timers Snyder laid off last month, 35% of unemployment staffers have been cut) didn’t say that unemployment actually started creeping up before Snyder made the layoff decisions.

Unemployment went up again in the last month, to 9.4% (some of this likely stems from a shift in model year layoffs and will probably go down next month), effectively reversing the last year of job gains and up 1.1% from its recent low.

Will the Snyder-loving press start reporting these job losses?

To be fair, I don’t think Snyder deserves all of the blame. Obama’s failure to provide real mortgage relief has been a big weight on economic growth in Michigan, even as the auto bailout and the energy investments have added jobs.

But Snyder has cut a lot of job-supporting efforts put in place under Jennifer Granholm. Not to mention–by gutting unemployment insurance staffers–cutting public employment so far as to bring down the rest of the economy.

Rick Snyder, like Mitt Romney is promising to do at the national level, promised his business friendly ways would grow MI’s economy. Instead, it looks like they’ve dampened the efforts that were put into place.

Trevor Thomas got some very nice props last night in his effort to win the Democratic nomination to beat Justin Amash in MI’s 3rd Congressional District: the endorsement of Jennifer Granholm and her former Lieutenant Governor, John Cherry. From the release:

“From day one Trevor has been a fighter for fairness and opportunity,” said former Governor Jennifer M. Granholm. “From the newsroom to the halls of Congress, Trevor has the experience and passion to get results on the issues critical to Michigan families. This is a campaign of inclusion that will stand up and represent all the voices of West Michigan and I am proud to support and be a part of it.”

“Trevor parent’s worked a combined 60 years on the lines of General Motors so he could have the chance to go to college, and now he is fighting for us all in his bid for Congress,” said former Lt. Gov. John D. Cherry Jr. “Trevor has worked to pass major federal legislation in support of our troops and he put party aside to get the job done. This is the fresh and progressive leadership we need today.”

Governor Granholm seems to get what this race is about.

Steve Pestka, Thomas’ primary opponent, will announce today. Given the DOJ events later in the day, I’m not able to rearrange my schedule to attend that announcement. But it looks like things are heating up (finally) in the 3rd.

I noted the other day how tired I am of MI’s Democrats asking women to ignore the anti-choice stance of so many of our Democrats, a stance which led to MI Democrat Bart Stupak dictating what kind of medical insurance women across the country can get.

Well, in the next 2 weeks, the party will have the opportunity to take the same stand the President just took and the same stand former Governor Jennifer Granholm, herself a Catholic, has taken, solidly in favor of health equality for women.

All that might not matter for Democrats–we might have the luxury of sitting back and laughing at their contest–except for one thing. Rick Santorum will also, as he has been doing, distinguish himself from Mitt Romney by championing manufacturing. Our issue. Manufacturing.

And while his policies wouldn’t actually help manufacturing as much as, say, cracking down on China’s cheating would, he will nevertheless be speaking to the plight of those working in manufacturing, even while preaching against the autonomy and equality of women.

If Santorum wins–as he is poised to do–this year’s electoral match-up may actually get decided here in MI. This year’s electoral match-up may get defined, at least locally, in the next two weeks. And that means it’s time to lay out what Democrats–what all people who believe women should not be second class citizens–stand for.

While Santorum wanders around our state we absolutely have to remind voters that the new manufacturing jobs were brought by Granholm’s outreach and Obama’s energy investments. We absolutely have to remind Michiganders that Santorum also opposed the auto bailout.

But I hope we’re also making that case that whereas Santorum believes in the dignity of just half the electorate, there is a party that champions–or damn well better champion–the dignity of all the electorate.

I’ve said a couple of times here that Jennifer Granholm’s record as governor was better than I gave her credit for, particularly economically.

The press is beginning to do some of the same reassessment. They’re discovering that, in spite of the Governor Engler tax cuts that made it harder to respond to MI’s downturn, Granholm did succeed in laying the groundwork for recovery.

But over the past year, a steady stream of economic statistics and research finds that Granholm is looking better in hindsight.

Here are some of the surprising Granholm highlights:

Michigan tied with Minnesota for the nation’s largest decline in unemployment from 2009 to 2010. The state also experienced the nation’s sixth-largest increase in per-capita personal income in that same year-to-year period.

State taxes as a percentage of personal income in 2011 are $7 billion lower than they were under John Engler in 2000. The fiscal problems the state faced were magnified by one statistic: Michigan’s overall tax revenues peaked during the prosperous year of 2000 and are not expected to return to that level until 2020.

Though the Granholm-backed Michigan Business Tax — the so-called “job-killer” tax — was still fully in place, the state achieved a substantial bounce in manufacturing jobs in 2010, a trend that was projected to continue throughout 2011.

Michigan ranks No. 1 in the nation for job creation improvement in a recent Gallup survey of state job markets, and Gov. Rick Snyder took office with some Granholm momentum that is expected to produce 64,600 jobs in 2011.

What this article doesn’t mention, of course, is that in addition to Granholm’s tireless effort to attract jobs and foster some diversity, MI also benefited from the massive government intervention of the auto bailout and received a number of grants that helped make possible factories like the Johnson Controls factory.

Speaking of which, here’s what the CEO of JCI, Steve Roell, had to say last Thursday about all the job creation Obama didn’t want to talk about.

Through innovation and investment in technology and people, Johnson Controls is a leader in the energy storage industry. We are investing more than $460 million in our advanced battery business for manufacturing and technical facilities here in Michigan and the U.S. These investments will lead to over 700 new jobs, retention of another 400, and provide approximately 1,000 construction workers.

We are doing that through several major efforts:

We recently announced we will be converting our Toledo, Ohio-area plant to produce batteries for Start-Stop vehicles, which have been successful in the European market and will be introduced next year in the U.S. These batteries help reduce fuel consumption and emissions by 5-12% for internal combustion engine vehicles with little added cost to the consumer. This investment will retain 400 jobs, and create 50 new positions and 800 construction jobs.

We recently opened our newly renovated Battery Technology and Testing Center in Milwaukee. It is the largest energy storage R&D center in the country, and we have added 60 new jobs. I’m pleased to say we just learned yesterday that Johnson Controls is receiving additional Department of Energy funding for research for developing green manufacturing processes and the next generation of lithium batteries.

This facility in Holland will be the first in the U.S. to produce complete lithium-ion battery cells and systems for hybrid and electric vehicles, producing battery systems for U.S. based automakers, such as the Ford Transit Connect. Employment at this facility will be 320 people at full capacity. We have committed to building a second facility in the U.S. Once we identify a location, build the plant and get to full capacity, we expect to add nearly 300 additional jobs.

These projects are great examples of public-private partnerships that use innovation and technology to produce products that reduce fuel consumption and create jobs.
We are very grateful for the outstanding support we have received from the White House, the U.S. Department of Energy, the state of Michigan and the city of Holland for their vision in building an advanced battery industry for vehicles in the U.S. and for the financial incentives they have provided. [my emphasis]

MI is by no means out of the woods yet (Governor Snyder’s cuts of both incentives and social benefits risk doing real damage). But it’s clear that it had started to turn around in 2009-2010. It’s clear that, partly because of government stimulus, what was then the basket-case of the US has started to turn around.

Yet for some reason, the government wants to avoid taking any lesson from this.

Eclectablog, who has been doing solid reporting on the takeover of Benton Harbor by an Emergency Financial Manager, has been wondering why MI’s Democratic Party hasn’t been more vociferous in supporting Benton Harbor. Today, he reported that MI Dems Chair Mark Brewer told Berrien County’s Dems that the MDP would not help them.

The occasion was the monthly meeting of the South County Democratic Club in Berrien County. Commissioner Dennis Knowles was in attendance. According to Commissioner Knowles, with whom I have spoken, Chair Brewer informed him that the MDP “could not help Benton Harbor” though he encouraged their recall effort of Rep. Al Pscholka. The MDP, however, will not assist in any way. In other words, Benton Harbor is on their own.

Now, while I don’t always agree with Brewer’s tactics, I respect his pragmatism, so I suspect part of what’s going on is driven by funding and/or a sense of the viability of recall efforts (the Snyder recall, in particular, would be really difficult to pull off because of the way our recall law is written).

But I also suspect something else is going on. Remember, Democrats in MI have themselves supported the concept of Emergency Financial Managers. In fact Jennifer Granholm’s administration put Pontiac and Benton Harbor itself into EFM status. So while Dems might be happy to knock off some Republican State Reps, they apparently remain committed to a city-based approach to financial stability. And that, it seems, stems at least partly from the way race has played out in this state.

As I noted before, one of the key factors contributing to Benton Harbor’s awful state is racism. Ditto Detroit, the schools of which are widely assumed to be the next target for Snyder’s EFM law. In both cases, a long history of segregation has resulted in the loss of the tax base of the city as more affluent whites left. The proper financial solution to that problem should have been more regionalized funding, but that wasn’t politically viable. Remember–MI is the home of the Reagan Democrats, the working class whites whom Reagan persuaded to put social issues ahead of their own class interest.

The thing is, it probably could be today. Or could have been just after the 2008 election. Here’s what Stan Greenberg said at that point when he claimed–prematurely, given the rise of the TeaPartiers–the Reagan Democrats were dead.

For more than 20 years, the non-college-educated white voters in Macomb County have been considered a “national political barometer,” as Ronald Brownstein of National Journal described them during the Democratic convention in August. After Ronald Reagan won the county by a 2-to-1 margin in 1984, Mr. Brownstein noted, I conducted focus groups that “found that these working-class whites interpreted Democratic calls for economic fairness as code for transfer payments to African-Americans.” So what do we think when Barack Obama, an African-American Democrat, wins Macomb County by eight points?

I conducted a survey of 750 Macomb County residents who voted Tuesday, and their responses put their votes in context. Before the Democratic convention, barely 40 percent of Macomb County voters were “comfortable” with the idea of Mr. Obama as president, far below the number who were comfortable with a nameless Democrat. But on Election Day, nearly 60 percent said they were “comfortable” with Mr. Obama. About the same number said Mr. Obama “shares your values” and “has what it takes to be president.”

Given Macomb’s history, this story helps illustrate America’s evolving relationship with race. These voters, like voters elsewhere, watched Mr. Obama intently and became confident he would work for all Americans and be the steady leader the times required.

For a brief period in 2008, MI (which is a pretty damned segregated state) put aside its legacy of racism in hopes a black President could bring benefits for all Americans. (Then Republicans used Obama’s imperfect effort to do that–in the form of health care–to stoke that racism again.)

It seems to me, Democrats need to finally, enthusiastically embrace a model that puts collective well-being at the center of a plan to respond to globalization, rather than letting black cities suffer the twin plights of racism and globalization. And that ought to include not only some political support for Benton Harbor’s fight for democracy, but also some creative solutions that don’t amount to starving cash strapped cities all in the name of short term–and short-sighted–fiscal responsibility.

On Saturday, I described how the democratically-elected government of Benton Harbor, a poor, segregated MI city about an hour south of me, lost its power to the city’s Emergency Financial Manager.

There are two parts of the story that I didn’t explain, which this post from wizardkitten does well. First, the EFM law goes back some years in MI and EFMs already had a great deal of power.

The idea of the state appointing an Emergency Financial Manager for local governments in distress actually dates as far back as 1988, and that led to Public Act 72 of 1990 (Blanchard did it!). Basically, it said that in order for the state to protect it’s own credit and fiscal operations, any city or school district that was on the verge of bankruptcy would receive a review of their finances from a state-appointed team, and, if that panel found that the city or school district did not have an adequate plan to get out of trouble, a manager would then come in and help clean up the mess.

The manager could hire staff and direct existing staff. They did not need public approval for a new fiscal plan. They could do anything they wanted with the outstanding financial obligations (i.e., the bills). They could renegotiate labor contracts, but they could not abrogate those contracts. They could eliminate positions except of those of elected officials, cut pay and benefits even for elected officials, sell property, review payroll – anything but touch retirement. They could not raise taxes. They also had the ability to start Chapter 9 bankruptcy if all else had failed.

Michigan’s initial muted response to Governor Rick Snyder’s move to increase EFM powers derives, IMO, from our familiarity with the concept and the fact so many are at a loss to figure out what to do with cities gutted by globalization. We’re the frogs in the boiling water of globalization, I guess, and we didn’t notice the heat going up on democracy itself.

The other really important part of Snyder’s new empowerment of EFMs has to do with the real target: teachers. Specifically, the teachers in Detroit’s public schools.

I believe this is a warm-up for Detroit, and perhaps the 150 other school districts that Snyder’s budget cuts are going to put closer to bankruptcy. DPS EMF Robert Bobb has indicated that he “planned to exercise his power as emergency manager to unilaterally modify the district’s collective bargaining agreement”, and by law the school district has now sent out 5,466 layoff notices to its union employees, and 250 pink slips to their administrators as well. (that is nearly a yearly occurrence anyway lately – but this time it takes on a new urgency.)

Bobb, under order by law to produce a plan to balance the books, came up with closing half of Detroit’s schools by 2014, 70 to be exact. He doesn’t want to do this, as class size is expected to swell to 60 and parents would flee the district costing the schools even more money – but the state has given the order. Some schools may turn to charters, and a GM-style bankruptcy that separates the bad debt has been talked about. Whatever happens, it’s going to be seismic.

As far as the city goes, Detroit Mayor Dave Bing is asking for benefit concessions from city employees and a new tax on casinos to help balance a budget that has a $155 million deficit and could grow to $1.2 billion by 2015, and his plan is already meeting resistance. Bing claims that, “If we are unable or unwilling to make these changes, an emergency financial manager will be appointed by the state to make them for us” – a bit of leverage, given what is going on with the Detroit Public Schools, and now this takeover in Benton Harbor. The heat is getting turned up fast in Motown, and it should reach a boiling point soon.

One other reason, I think, why we boiling froggies haven’t reacted sooner: the UAW. What EFMs have in store for teachers really matches what the auto companies accomplished with UAW’s workers even before the 2009 bailout. The UAW willingly accepted a two-tier system of wages (effectively meaning starting UAW workers make less than workers at transplant factories in other states), and took on the costs of retiree health care.

In other words, one of our state’s unions has already been gutted in the face of harsh threats. The threat of EFMs will make it easier to do so with the public unions too.

It’s all about turning MI from a state with a solid middle class into one with desperate workers willing to make huge sacrifices just to keep their jobs.

DDay reported on OCC’s attempt to preempt a foreclosure settlement on Monday. Today, Yves Smith has a long post giving the consent decrees the banks are trying to roll out in lieu of a real foreclosure settlement the disdain they deserve.

Wow, the Obama administration has openly negotiated against itself on behalf of the banks. I don’t think I’ve ever seen anything so craven heretofore.

[snip]

The part I am puzzled by is who is behind this rearguard action. It clearly guts the Federal part of the settlement negotiations. If you pull out your supposed big gun (ex having done a real exam to find real problems, and it’s weaker than your negotiating demands, you’ve just demonstrated you have no threat. Now obviously, a much more aggressive cease and desist order could have been presented; it’s blindingly obvious that the only reason for putting this one forward was not to pressure the banks, as American Banker incorrectly argued, but to undermine the AGs and whatever banking/housing regulators stood with them (HUD and the DoJ were parties to the first face to face talks).

So the only part that I’d still love to know was who exactly is behind the C&D order? Is it just the OCC?

But what I’d like to know is why, coincident with the roll-out of this Potemkin resolution to the foreclosure problem, someone told Reuters that the Administration was considering Jennifer Granholm and/or Sarah Raskin to head the Consumer Finance Protection Board.

The White House is considering Federal Reserve Governor Sarah Raskin and former Michigan Gov. Jennifer Granholm to head a new agency charged with protecting consumers of financial products, a source aware of the process said Tuesday.

You see, as Yves reminds us, one part of the whole AG settlement that this consent decree seems intended to replace was that Tom Miller, Iowa’s Attorney General, would get the CFPB position as his reward for shepherding through such a crappy settlement.

So now, with the consent decrees the apparent new plan to appear to address foreclosures without penalizing the banksters, the Administration rolls out the claim that it is considering Granholm and Raskin?

This story says I’m under consideration for the CFPB job. I have declined to be considered for this post. I’m happy in my new roles at Pew, Berkeley and Dow. And, by the way, while I don’t know Raskin and she may be great, I think nominating Elizabeth Warren is a fight worth waging.

See, best as I can guess (and this is a guess), by pulling the plug on the AG settlement, the Administration lost its best case for appointing someone not named Elizabeth Warren to assume the CFPB position. Whereas they might have been able to claim (falsely) that Miller had achieved this great progressive settlement for homeowners, now they’ve decided to stick with the status quo rather than even a bad settlement. Which leaves them with the increasingly urgent problem of who heads the CFPB when it goes live in July.

And so they float a report that the one blond woman who is as much of a rock star as Warren is might get the position? Do they think Democrats can’t tell the difference between charismatic blonde women (or that progressives would confuse the down-to-earth but centrist Granholm for Warren)?

It’s like they’ve got a Craigslist posting up somewhere:

Wanted: blonde woman with great people skills and rock star looks to serve as figurehead for a position purported to exercise real power to protect American consumers, but which will instead be asked to serve up Timmeh Geithner coffee and complete deference. Democratic affiliation a plus but not necessary.

Governor Granholm sounds a lot like someone who has been wandering around these parts–calling on JP Morgan and the other banks that got bailout funds to return the favor to Chrysler.

Gov. Jennifer Granholm said this morning that any banks that received rescue money from the federal government should be open to concessions on the Chrysler debts they hold so the automaker can reach a deal with Italian carmaker Fiat necessary for its survival.

The White House last week suggested that Chrysler could be pushed into bankruptcy if it doesn’t find a partner in 30 days’ time.

Part of what stands in the way of a deal with Fiat is restructuring Chrysler’s debts and Granholm said following a panel discussion this morning that any of those debt holders who received backing from the government’s Troubled Asset Relief Program, or TARP, “should be willing to take a haircut.” Or, in other words, write down the value of that debt.

Republican senators have just delivered a fierce slap at three million workers across America. Their no vote is an astounding blow: They have chosen to ignore the livelihood of three million Americans, three million families, and in the process have chosen to drive the American manufacturing industry – and perhaps the American economy – into the ground. They are choosing foreign competitors over American industry and American workers. A nation without a strong manufacturing sector is a nation without a viable defense sector. This is a shameful day, a day we will not forget. I implore President Bush not to let the American economy slide from recession into depression as he leaves office. Direct the Treasury Secretary or the Chairman of the Federal Reserve to use their authority to save the American auto industry, three million American jobs, and our nation’s economy. The moment could not be more urgent. Mr. President, American workers are depending on you. Save these jobs.

John Cherry

We are witnessing Congressional unraveling of the American Dream and the demolition of the very foundation of our national security. A few beltway insiders who are completely out of touch with the struggles of American families decided to settle old political scores at the expense of millions of jobs and our national economic security. While bankers get the keys to the Treasury our manufacturers get a one-way ticket to bankruptcy and American families are left unprotected.

I wanted to draw your attention to two statements about an auto bailout to show where this is going to go ideologically. First, Richard Shelby:

The financial straits that the Big Three find themselves is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force. The financial situation facing the Big Three is not a national problem, but their problem. I do not support the use of U.S taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers in such a way that allows them to continue and compound their ongoing mistakes. [my emphasis]

What Shelby doesn’t mention, of course, is that Alabama is a right to work state. Shelby also doesn’t mention that Alabama is home to Honda, Toyota, Hyundai, and Mercedes plants. Shelby also doesn’t reveal that many of the cars those manufacturers make in Alabama, without unions, are precisely the kind of behemoths critics attack Detroit for making–only these have foreign nameplates: M-Class SUV, GL-Class SUV (a new model), Pilot SUV, Santa Fe SUV, plus engines for Tacoma and Tundra pick-ups and Sequoia SUVs.

In other words, Shelby isn’t opposed to car companies that are stupidly committing and recommitting to SUVs. Rather, he’s just opposed to car companies that make SUVs with union labor.

Beyond the massive job loss, beyond the potential collapse of an entire economic sector, Congress and the Bush administration need to provide immediate assistance to the auto industry because America’s energy independence is a critical national need. And the U.S. auto industry is the sector to lead the way to that energy independence.

How? The car you drive will be the storage unit for your energy needs. Your home, your car, your appliances can all be powered through the advanced battery that will sit inside your plug-in electric vehicle. Today, most batteries come from Asia, and much of the oil comes from the Middle East. It is a national-security, energy-security imperative to produce advanced batteries and next-generation biofuels here at home.

[snip]

Supporting the automotive industry through the current crisis and steering a clear transition to a low-carbon future will create millions of middle-class jobs that are vital to a strong economy while reinvigorating American technological superiority.